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Making Fast Food Even Faster

Joseph Gagnon, chief executive of Exit 41, which makes software for restaurant chains, views a customers car on a monitor at a Wendys in Nashua, N.H.Credit
Robert Spencer for The New York Times

FAST food is a slow sell for new technologies.

It took four years, for instance, for HyperActive Technologies, which makes a system that uses artificial intelligence to predict customer order flow, to have a restaurant chain buy the product. And it took three years for Exit 41, a developer of call-center software, to make its first significant corporate sale. HyperActive Technologies started selling its system, HyperActive Bob, in 2003 and had a few sales here and there. But not until January this year did it land a corporate customer, when Zaxby’s Franchising, a chain of 400 restaurants based in Athens, Ga., approved the system for use in all its franchises.

And, this month, Swiss Chalet, a 190-restaurant unit of Cara Operations in Scarborough, Ontario, bought a new version of Exit 41’s software.

Call-center technology is well established in most industries, and the restaurant business in general would seem a huge opportunity. There are an estimated 195,000 fast-food and 80,000 casual-dining restaurants in the United States, according to the National Restaurant Association. Most have adopted new technology only to a degree — computerized cash registers, for instance, or high-speed networking technology.

Interest is growing in restaurant technology companies. Venture capitalists have invested almost $650 million in 27 such businesses, according to the National Venture Capital Association, with the $143 million in 10 companies in 2006 marking the biggest year since 2001.

R. Coulter, co-founder and chief scientist at HyperActive, based in Pittsburgh, says he decided to use his Ph.D. in robotics from Carnegie Mellon University on fast food rather than, say, space exploration because “it’s the last $100 billion industry that still makes all its products by hand.”

But sales take “yeoman missionary work,” says Joseph Gagnon, the chief executive of Exit 41, which is based in Andover, Mass. Just last week, Mr. Gagnon says, the company received its first “request for a proposal,” an overture from a possible buyer of its products.

“That we got an R.F.P. tells me I made it,” he exults. It was only 12 months ago that he had to persuade his venture backers not to close down the company.

Both men see a real need. In studying the market, Mr. Gagnon has taken orders in drive-through restaurants at lunchtime and calls the experience “scary.” A trim 46-year-old who has not missed his daily workout in more than three years, he says that trying to keep up with customers’ orders made his heart race.

Similarly, Mr. Coulter researched the market by working as a cook at a McDonald’s. “The whole issue is you get completely crushed with enormous orders in a small amount of time,” he says.

They aren’t suffering from tunnel vision, either.

“The biggest issue everyone is focused on in technology in the industry today is something called speed of service,” says Robert Grimes, chief executive of Accuvia Consulting in Potomac, Md., an authority on the use of technology in restaurants.

He says there are many ways to go faster. Having orders handled from outside call centers — using software like Exit 41’s or that of rivals like the CBord Group and Jacent Technologies — is one path, as is automating the kitchen, where SCK Direct offers an alternate approach to HyperActive’s.

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Web ordering is on the rise, especially in pizza delivery, where one interesting start-up is O-Web Technologies. Its three founders graduated in May from Case Western Reserve University, where they worked in their dorms to develop the ONOsys online ordering system.

And some restaurants are looking at offerings of ESP Systems, which sells a wireless tabletop hub that customers use for things like summoning their waiter, thus speeding table turnover.

But interest in speed doesn’t mean quick adoption of ideas. (After all, many fast-food franchises adopted credit-card processing only in the last few years.)

In part, that’s because the main budget priorities in the industry are food quality and restaurant image, with new technology a distant third, says Roger C. Matthews Jr., head of the restaurant group at the investment banking unit of the Goldman Sachs Group.

Mr. Matthews says the market is also risk-averse and prone to testing things to their limit — no restaurant can afford a computer failure at peak time. Many of the big corporations also prefer to develop their own technology, possibly slowing the advance of new ideas. And the lengthy real estate boom raised the costs of running restaurants, reducing capital in areas like technology.

There are also low-tech, low-cost alternatives for speeding up operations, like sending workers out to take orders from cars waiting in line, says Ron Paul, president of Technomic, a food and restaurant industry consultant.

Neal E. Sessions III, director of information technology at Zaxby’s, says that “the restaurant technology environment generally lags other industries by three to five years.” He thinks the gap will close in the next five years because many restaurants have invested in broadband infrastructure and will start adding applications. Zaxby’s, for example, is developing a training system that uses Web-based materials and testing.

MR. GAGNON at Exit 41 has seen this cycle before. In 1985, he worked at the Mercantile Stores Company, now part of Dillard’s, and outfitted what was then a McAlpin’s department store in Lexington, Ky., with an early bar-code scanner. At the time, there were all kinds of concerns about the technology, but now it is ubiquitous. He says the time is coming, and soon, when that will be true of the new technology in restaurants.